Tack paving as a joint on a crack in the asphalt
Politics Instead of Blind Faith in the Market

The EU must not become the catalyst of the continent’s divisions. The attempt to stylise the 2019 European elections as a decisive battle against right-wing populism turned out to be a failure. The opponents of the integration process to date have won, Christian Social Democrats have been punished. What went wrong?

The reasons for this development are often to be found in specific national constellations. Unfortunately – one must add. Yet again, it has not been possible to bring the common European interest into the focus of election campaigns. Transnational lists were hindered in the run-up to the European elections, as was the visibility of the top candidates. The often-invoked European public did not even go to the polls at the same time. Many parties on the continent pursued their own, specific agendas and positioned themselves either from a clearly national perspective or all too vaguely with respect to concrete European projects for the next legislative period of the European Parliament until 2024.

Soporific campaign

Evidently, Europe – as the once mighty Christian and Social Democratic parties in particular seem to believe – does not play a special part in the public's sensitivities. Those who do not see themselves as EU opponents could be distracted from urgent questions about the future of the EU through reference to the achievements of almost 70 years of the integration process. Freedom to travel, economic space, peacekeeping – who would not want to defend all that? Even more so against the ambitions of the far right, for which the Schengen free movement of persons is just as much a thorn in their side as the euro. But the soporific electoral campaign, the highly jazzed-up decision-making in the electoral booth between 'For' and 'Against' Europe was a fiasco in terms of content and strategy. Thus there were few detailed proposals as to how the EU could overcome its lines of division and find its way to a constructive position. And the political centre hid behind feel-good consensus rhetoric that rendered differences unrecognisable and in so doing benefited the right-wing populists in their opposition rather than damaging them.

Cross-border challenges

Europeans have well understood that there can be no such thing as a simple 'carry on as before'. In the last ten years, nothing has revealed the transnational dimension of numerous policy areas more clearly than the minor and major crises in the EU: curbing climate change, mending social divisions, managing migration and integration, regulating and containing market excesses – from the financial market to location competition to real estate speculation. None of this can be tackled by the classical nation-state alone, no matter how large, economically potent or politically influential it may be. The proponents of a return to the nation are mistaken when they believe that more national sovereignty is better than cooperation with neighbours. Cross-border challenges demand cross-border answers. Global interdependence cannot be turned on and off with a toggle switch. The proffer of success through unilateral action goes hand in hand with isolation, externalisation and suppression of global risks.

Downsides of globalisation

But the supporters of the idea of Europe are also on the wrong track when they showcase an uncritical continuity of European policy. During the crises of recent years, the internally divided EU has shown itself incapable of countering the growing unease with policies of substance. In almost all European countries, this unease is fuelled by frustration with the downsides of globalisation, the loss of the promise of advancement and prosperity, as well as the politics of post-democracy, which justifies measures with their alleged lack of alternatives. Confidence in an automatic political deepening of European integration has been shaken by the latest cascade of crises. An internal market that does not prevent fiscal and social dumping, a monetary union without an economic coordination centre, free movement of persons without external border protection and immigration policy – the political union will not come about by itself. It will not come about by adhering to a bizarre faith in the market, with which the political structure of the common market is labelled as detrimental to its alleged self-regulation and disadvantageous to global competition, and is regarded as absurd because national competences must be retained. Of course, it has always been easier for member states to abandon borders, tariffs and national currencies than to create new political structures, institutions and rules. Where an agreement was reached at the European level on political goals, such as climate protection, no sufficient set of instruments pressing for implementation and greater ambition was agreed upon out of consideration for the market and national sensitivities.

Ways out of the dilemma

So how will we get out of this? First of all by realising that the EU is not the cause of discomfort with globalisation, the emergence of downwardly-mobile societies and the weakness of policy-making in terms of influence and conviction, but that at the same time it must no longer serve as its catalyst. It was the member states that opened the door to free-market dominance with national deregulation and market-creating European agreements. They can only close it again if Europe provides them with support through a regulatory framework. The crises of recent years and their inadequate management provide an opportunity to put our own European house in order. It could begin in two particularly controversial areas: a crisis-proof restructuring of the monetary union and the strengthening of social rights in the EU.

Stabilisation through a fiscal union

The division of the monetary union has become more entrenched with the euro crisis. So far, the supporters of a stability union have set the tone, focusing on austerity and structural reforms. Without a further development of the euro zone towards a fiscal union, however, it will remain crisis-prone. It could become crisis-proof through a Europe-wide stabiliser to combat regionally occurring crises, guarantees of shared risk assumption in the event of a crisis and the timely prevention of macroeconomic imbalances through a new macro-dialogue at community level that brings all relevant economic actors together.

Minimum European social standards

The EU was attractive for a long time thanks to its goal of creating equal living conditions. But in the meantime, socio-economic indicators have been showing divergences rather than greater convergence. Even though the last economic crisis is over, many countries continue to suffer from high unemployment and poverty rates. But the social divide is not only the problem of those who have suffered most recently from the crises: Competition between welfare states for low taxes, wages and social security contributions damages the national social systems of all. The asymmetry of European integration, which relies on market deepening rather than market shaping, could be brought into a new equilibrium by strengthening the recently proclaimed yet still legally unsupported European Pillar of Social Rights. It could be complemented by obligatory minimum standards and target values in a social protocol with treaty status.

The EU as a model of institutionalised cooperation is the solution to transnational challenges faced by all states. Europeans have long understood how valuable this long-evolved construct is to them despite all its inherent contradictions and shortcomings. The 25-year high level of voter turnout in the European elections shows that citizens are prepared to seek compromises and overcome divisions. Are policy-makers prepared to do the same?

About the author

Dr Björn Hacker is Professor of European Economic Policy at the University of Applied Sciences, Berlin (HTW). Most recently appeared his book Weniger Markt, mehr Politik. Europa rehabilitieren.